How do insurers handle large or complex claims?

Insurers handle large or complex claims by involving specialized claims teams, often with expertise in specific industries or types of losses. These claims require in-depth investigation, extensive documentation, and coordination with external experts, such as engineers, lawyers, or forensic accountants. The process can be time-consuming, but it ensures that the claim is assessed accurately, and that the settlement is fair and comprehensive.

How does adverse selection affect insurance markets?

Adverse selection happens when high-risk individuals buy more insurance than low-risk ones, leading to higher premiums and potential market inefficiencies due to unbalanced risk pools.

What does general liability insurance cover?

General liability insurance covers third-party claims for bodily injury, property damage, and personal injury (such as libel or slander). It helps pay for medical expenses, repair costs, legal fees, and settlements if a business or individual is found responsible for causing harm to another person or their property.

How do I apply for term life insurance?

The application process includes completing a form, answering health questions, and possibly undergoing a medical exam. The insurer evaluates your risk before approving your policy and setting premiums.

What is an insurance deductible?

A deductible is the amount a policyholder must pay out of pocket before the insurer covers the remaining cost of a claim.

What are the different types of captive insurance companies?

There are several types of captives, including pure captives (owned by a single parent company), group captives (formed by multiple companies), rent-a-captives (allowing businesses to "rent" a captive structure), and association captives (owned by members of an industry group). Each type serves different business needs and risk profiles.

Are insurance proceeds from a business interruption claim taxable?

Yes, business interruption insurance proceeds are taxable as business income since they replace lost revenue. However, businesses can offset the tax by deducting related expenses.

Does cyber insurance cover the reputational damage caused by a data breach?

Some cyber insurance policies include coverage for reputational damage, such as public relations efforts to rebuild the company’s reputation after a breach.